RBNZ reviews Non-Bank Deposit Takers regime

Release date

04 April 2013

The Reserve Bank today released a consultation
paper (384KB) on its review of the prudential regime for Non-Bank Deposit
Takers (NBDTs).

NBDTs are entities that offer debt securities to the public, and borrow and
lend money, or provide financial services, or both, but which are not banks. In
New Zealand, they are commonly finance companies, building societies and credit
unions.

Reserve Bank Deputy Governor Grant Spencer said: "NBDTs play a valuable
role in the financial system by providing alternative deposit products to
customers and investors, and alternative sources of funding for individuals and
businesses.

"With the core parts of the prudential regime for this sector having
been in place since late 2010, it is timely to now step back and assess the
framework's overall operation and efficiency and to ensure it is
appropriately tailored for the current NBDT environment."

Key parts of the consultation document include fine-tuning the definition of
what constitutes an NBDT and ensuring the appropriate supervisory arrangements
are in place for the sector.

The paper also looks at the underlying objectives of the regime, as well as
considering the prudential and disclosure requirements, the offences and
penalties in place for non-compliance, and crisis management powers.

"In looking at these matters, the Bank is conscious of the licensing
regime for NBDTs that is currently before Parliament, and how this will affect
the regulation of NBDTs in future," Mr Spencer said.

The Bank will prepare a report for the Minister of Finance on the outcomes of
the review, which will then be tabled in Parliament. More information on the
Reserve Bank's prudential supervision of NBDTs is available on the Bank's
website.

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